Oil and gas company Shell is buying electric vehicle charging operator Volta for $169 million through a subsidiary. The deal, which the companies expect to close in the first half of this year, amounts to 86 cents per share, around 18 percent more than Volta's closing price on Tuesday.
Volta's board of directors approved the deal unanimously, though it still requires the green light from shareholders. It's subject to regulatory approval and other closing conditions too. Shell will provide loans to Volta to give it a hand through the closing of the transaction. On September 30th, Volta had $15.6 million in cash and cash equivalents, compared with $262.2 million at the end of 2021.
"While the EV infrastructure market opportunity is potentially enormous, Volta's ability to capture it independently, in challenging market conditions and with ongoing capital constraints, was limited," Volta interim CEO Vince Cubbage said in a statement. "Both Volta and Shell have a demonstrated ability to meet the changing needs of customers, and this acquisition will bring that experience together to provide the options that are needed as more drivers choose electric."
The company has more than 3,000 charging stations across the US and a handful in Europe, typically at grocery stores and malls. For a few years, its DC fast charging stations were free to use for up to 30 minutes, with advertising and sponsorships helping to cover the costs. However, it shifted its DC fast chargers to a paid model last year. Volta's more than 2,000 L2 chargers are still free to use. After the deal closes, "there will be no immediate change in driver experience," the companies said.
Odd as it may seem that an oil company is buying an EV charging network, it isn't the first time Shell has done so. It snapped up UK network Ubitricity in 2021 for an undisclosed sum. Last year, Hertz and BP announced plans to set up a charging network in the US.